Wednesday, February 24, 2010

Any Close Tomorrow Below Today's Closes Will Carry Both Metals Down, at Least to the Old Lows

Gold Price Close Today : 1096.50
Change: -6.20 or -0.6%

Silver Price Close Today : 15.940
Change 05.2 cents or 0.3%

Platinum Price Close Today: 1504.60
Change: -20.90 or -1.4%

Palladium Price Close Today: 420.75
Change: -19.75 or -4.5%

Gold Silver Ratio Today: 68.79
Change: -0.615 or -0.9%

Dow Industrial: 10,374.16
Change: 91.75 or 0.9%

US Dollar Index: 80.79
Change: -0.06 or -0.1%

The GOLD PRICE fell below $1,100 in European trading and hit a low today of $1,090. On Comex it closed at $1,096.50, down $6.20. this amounts to a trip to visit the 20 day moving average at $1,094.20. RSI and MACD are positive and even with today's drop remain in an uptrend in force since the 5 February low. Tomorrow will tell us whether gold will re-visit that February low or climb over $1,100 and advance.

Yet here's what makes no sense. Gold dropped $6.20 below important $1,100 support, but the silver price smiled, rose 5.2c, and closed on Comex at $15.94c In the aftermarket it is flirting with $16.00. Today's trading looks like a V-bottom with a low at $15.638. Yet silver standing just below its 200 DMA while the 20 DMA crosses under the 200 looks wretched. Quick, remind me that a visit to the 200 DMA usually marks the END, not the beginning of a down-move.

Maybe there is no explanation, except that silver will trade sideways as it heals from the wounds of the last 3 months. Here's another guess. The correction that began over the weekend has run its course with today's lows and the next move for metals will be up. Obviously any close tomorrow below today's closes will carry both metals down, at least to the old lows.

The US DOLLAR INDEX surrendered 6 basis points today and tradeth now at 80.791. Its indicators are overdone and overdue for a fall, so maybe the dollar is rolling over gravity-ward. Let me slap myself here: the uptrend remains in force unless the $ index closes below 79.83, the 20 DMA. Yesterdays intraday high was 81.34, so the dollar has nearly reached my 81.50 target.

Hooray for post-industrial America! Dow rose 91.75 today, but the question gnawing at me is, Can it remain above the 20 DMA (now 10,192)? For now the Dow remains in a downtrend and nothing today changed that. S&P rose 10.64 to 1,105.24 while the Dow closed at 10,374.16.

On this day in 1836 Inventor Samuel Colt patented his revolver and did more for good manners than anyone since the man who invented the table napkin.

Sorry, but I won't be sending a commentary Thursday or Friday because I will be in Atlanta, speaking at the 10th Amendment Summit on Friday. For details see

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

© 2009, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.